Insight Focus
NDM prices have stabilised after months of volatility. Renewed Mexican buying and tighter spot availability helped support dry dairy ingredient markets, with NDM finding a more sustainable trading range following a sharp rally. Meanwhile, tight inventories kept whey and lactose prices firm, while butter and cheese markets remained broadly balanced as cooler weather boosted US milk production.
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Dry dairy ingredient markets were mixed this week as improving export demand, particularly from Mexico, and tightening spot availability supported prices across several categories. Butter and cheese markets were generally balanced, while milk production improved in much of the country as cooler temperatures eased heat stress on dairy herds.
NDM Market Finds Footing as Mexican Demand Returns
Nonfat dry milk (NDM) prices showed signs of levelling after months of volatility. Central and East region prices moved slightly higher, with buyers reporting the market appeared to have found stability. Export demand from Mexico remained a key source of support.
One trader remarked that the recent rally was less a reflection of changing supply-and-demand fundamentals than a correction from prices that had fallen below fair value. After climbing roughly 20c on the CME over the past two weeks, the source said NDM had reached “a more natural equilibrium,” with current values more representative of underlying fundamentals.
The trader added that some short-term consolidation would not be surprising following the rapid advance, noting that the theme of the nonfat market this year has been that “things don’t move slowly.” Mexican buying, which was largely absent through late June and much of July, has also begun to return as buyers gain confidence that the market has established a bottom.
Tight Inventories Keep Whey Complex Supported
Whey protein concentrate 34% (WPC34) prices strengthened again on constrained production schedules and limited inventories, while lactose markets held a firm tone on tight supplies and steady demand.
Milk production recovered across much of the country as cooler weather improved cow comfort.
CME Group butter prices were little changed. Central region churns continued running busy schedules on contracted cream despite limited spot purchases, while steady domestic demand and solid export interest supported the market. Abundant cream supplies supported consistent production, though buyers were expected to draw on inventories as schools reopen and seasonal demand increases.
Cheese production was steady. Mozzarella gained some momentum ahead of the fall pizza season.
